Do you own real property in multiple states? Perhaps you are a snowbird or own investment properties such as rentals in more than one state. If you do, your estate will likely be required to go through probate in each state where you own real property at the time of your death. Probate isn’t necessarily a bad thing, but it is often very time consuming and can quickly become expensive with court costs and lawyer’s fees. In cases where real property is owned in multiple states, that would mean going through probates in each of those states.
However, there are a number of methods that can be used to try to avoid probate:
One method is to add the intended heirs to the title of the real estate while the primary owners are still alive. However, this is not often advised. If any of the intended heirs (who then become co-owners of the real estate) get into financial trouble – such as bankruptcy, divorce, being sued, creditor issues, etc. – the primary owners of the real estate also become involved in their financial trouble. Parents shouldn’t lose their home or other properties because their child was sued by another person.
Another option is a “Pay on Death Deed” which names a recipient to receive the real property after the current owner passes away. Among other disadvantages, there are a number of states that just don’t allow the use of Pay on Death Deeds. Check each state you own real estate in to see if this may be an option for you.
Typically, the most ideal solution is to use a living trust. Like a last will and testament, a living trust allows you to leave directions for who receives what from your estate and who is in charge of carrying out the administration of your estate following your death. A living trust, however, does not need to be administered through the probate court system. This trust can hold title to any real property that you own in any state, so you don’t have to go through probate in any of these states. People often think that trusts are a tool only for the extremely rich, but anyone who owns real property and doesn’t want it to have to go through probate (or multiple probates) may find a living trust to be beneficial.
For help with your estate plan, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC at 708 482 7090 for our main office in LaGrange, Illinois or at 847 656 8958 for our Northbrook, Illinois office.